Tencent Holdings has reported a drop in annual revenue for the first time in its history, owing to China’s economic slowdown caused by the pandemic and a long-running regulatory crackdown.
The world’s largest video game company and operator of the WeChat messaging platform reported revenue of 554.55 billion yuan ($81 billion) in 2022, a 1% decrease from the previous year.
According to Refinitiv, analysts expected 555.15 billion yuan on average.
Its revenue for the fourth quarter ended December increased 1% year on year to 144.95 billion yuan, compared to a consensus estimate of around 144 billion yuan.
Tencent’s profit attributable to equity holders fell 16% year on year to 188.24 billion yuan, falling short of the consensus estimate of 114.19 billion yuan.
The findings come amid an uncertain business outlook in the world’s largest gaming market following a two-year crackdown, but industry participants are cautiously optimistic about a recovery, as regulators began granting publishing licenses late last year after a months-long freeze.
Unlike in most other countries, video games in China must be approved by regulators before being released.
Tencent’s domestic gaming revenue fell 6% in the fourth quarter to 27.9 billion yuan, while international gaming revenue increased 5% to 13.9 billion yuan.
Tencent’s online ad revenue increased 15% to 24.7 billion yuan as brands increased their spending amid a recovery.
Even as Tencent continues to expand in these areas, revenue from fintech and business services fell 1% in the quarter to 47.2 billion yuan.
